The number of planned layoffs at U.S. firms surged in August to their highest in half a year, with industrial goods manufacturers the hardest hit, a report on Thursday showed.

Employers announced 50,462 layoffs last month, up 33.8 percent from 37,701 in July, according to the report from consultants Challenger, Gray & Christmas.

The August job cuts were up 57 percent from the same time a year ago. For 2013 so far, employers have announced 347,095 job losses, close to the 352,185 that were seen in the first eight months of last year.

The largest cuts came in manufacturing, which had their worst month since January 2009:

Industrial goods manufacturers saw the biggest layoffs, cutting 22,162 employees, the largest total for the sector since January 2009.

Gallup sees a similar trend. Not only has their measure of unemployment jumped up, their measure of workforce participation continues to fall:

The U.S. Payroll to Population employment rate (P2P), as measured by Gallup, dropped to 43.7% in August, from 44.6% in July, and is down from 45.3% in August 2012. …

Unlike Gallup’s P2P rate, which is a percentage of the total population, traditional employment metrics, such as the unemployment rates Gallup and the U.S. Bureau of Labor Statistics report, are based on a percentage of theworkforce. Gallup defines the “workforce” as adults who are working or actively looking for work and available for employment.

The U.S. workforce participation rate in August was 66.4%, a decline from 67.7% in July, and down from 68.1% in August 2012.

Gallup’s unadjusted unemployment rate for the U.S. workforce was 8.7% in August, up from 7.8% in July and from 8.1% in August 2012. Similar to P2P, unemployment fluctuates seasonally, and the year-over-year change is the most informative comparison. The uptick in unemployment this August compared with August of last year is the first year-over-year increase since Gallup was able to begin tracking yearly changes in 2011.

The increase is partly due to the decline in the size of the workforce. Because the unemployment rate is based on the size of the workforce, if people drop out of the workforce but the number of unemployed remains relatively flat, the unemployment rate will actually increase, even though the same number of people are unemployed. This is at least partly responsible for the increase in August’s rate, though some of the jump is a true increase. When looking at the population as a whole, in August 5.8% of the population was unemployed, compared with 5.3% in July and 5.5% August 2012.

It will be interesting to see whether these trends show up in the BLS report tomorrow. Gallup uses similar methodology for its survey, but it uses a larger sample across a longer period of time. If BLS’ surveys see the same trend, we may see the first jump in the U-3 jobless rate in some time.

New orders for manufactured goods in July, down following three consecutive monthly increases, decreased $12.0 billion or 2.4 percent to $485.0 billion, the U.S. Census Bureau reported today. This followed a 1.6 percent June increase. Excluding transportation, new orders increased 1.2 percent. Shipments, up two of the last three months, increased $5.3 billion or 1.1 percent to $487.6 billion. This followed a 0.3 percent June decrease. Unfilled orders, up five of the last six months, increased $4.0 billion or 0.4 percent to $1,033.9 billion. This was at the highest level since the series was first published on a NAICS basis in 1992, and followed a 2.1 percent June increase. The unfilled orders-to-shipments ratio was
6.44, up from 6.38 in June. Inventories, up seven of the last eight months, increased $1.5 billion or 0.2 percent to $629.7 billion. This was at the highest level since the series was first published on a NAICS basis and followed a 0.2 percent June increase. The inventories-to-shipments ratio was 1.29, down from 1.30 in June.

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Ed’s so cute. He continues to believe, despite all evidence to the contrary, that numbers still matter. I predict 175k-200k jobs tomorrow (closer to the top than the bottom), and a .1 drop in the rate.

This will be revised negatively next month, of course, but by then no one will care. Actually, the negative revision will help, because then the next report can be compared to the revised report from this month, “Look how much things are improving!”

I got word this morning that AMEX in Phoenix AZ will be laying off some supervisers because: Those with senority because they have too much vacation time available.
We are talking about people who have been there 20+ years!

These numbers just can’t be right. I read online this morning that the Dow was up because of positive economic news such as GM and other car manufacturers seeing the best August in 6 years!

YES WE CAN!
YES WE CAN!
YES WE CAN!

So, given that this country managed to elect a man to the presidency who has no real biography whatsoever twice, I keep wondering how much more we can screw ourselves up and in what imaginative, dystopian ways?

Gonna be a Grinchy Christmas, I predict. Personally I’m fine with that – Christmas should not be so materialistic. But many people won’t know what to do for Christmas if it’s not about getting and giving oodles of stuff. We’ll see what that leads to, won’t we?

Oh, and don’t forget that guys like Dave Ramsey believe all this dismal gloom and doom talk is mere hogwash. I love his getting out of debt angle, but he does tell his millions of listeners to invest their hard-earned money in the future. Personally, I am not investing a dime in the future, but rather hunkering down (including avoiding debt) and look to salvage what I can.

I got word this morning that AMEX in Phoenix AZ will be laying off some supervisers because: Those with senority because they have too much vacation time available. We are talking about people who have been there 20+ years!
Hard Right on September 5, 2013 at 3:15 PM

I’m an over-50 IT worker with pretty good benefits and vacation time. I have to accept the fact that if my company thought they could replace me with a twentysomething who would basically work for food, they probably would.
Also… my company used to bring in many workers through temp agencies and make them perm direct after 90 days. Now? They stay temp indefinitely.

Gonna be a Grinchy Christmas, I predict. Personally I’m fine with that – Christmas should not be so materialistic. But many people won’t know what to do for Christmas if it’s not about getting and giving oodles of stuff. We’ll see what that leads to, won’t we?

Marcola on September 5, 2013 at 3:28 PM

You forgot about the fact we’re more than halfway through our Lost Decade.

Carrying over my comments from the ADP thread regarding Gallup and the unmentioned ISM August indices…

Gallup has your monthly dose of cold water with their 4-week seasonally-unadjusted rolling averages:

- Unemployment rate (analogous to the U-3 rate) on 8/17 (the end of the reference week) – 8.6%, +0.7 points from the end of the July reference week (7/13), the highest in the short 4-year history of Gallup unemployment surveys. Of course, last year, the July-to-August reference week Gallup change was +0.4 points, when the BLS said it was -0.4 points on both the 16+ group that is the headline and the 18+ group Gallup surveys.

- Underemployment (analogous to the U-6 rate) on 8/17 – 17.6%, +0.4 points from 7/13. Historically, it has been about 2 points above the BLS U-6 rate, though the spread has been increasing over the last 12 months.

- Employment/population ratio on 8/17, 43.8%, -1.1 points from 7/13. Gallup does not use the “civilian non-institution” version of population, so it has always been significantly lower than the BLS equivalent.

I had high expectations of seeing the usual “unexpectedly” qualifier. I have become so accustomed to seeing “unexpectedly” in EVERY Obama-era economic news item that I now suspect this is a COMPLETE FAKE REPORT from The Onion.

Because Reuters expected even worse news on factory orders, sort of like the Europeans celebrating the fact the Eurozone GDP is expected to shrink by 0.4% (annualized/Americanized -0.8%) over the last half of this year.

A 1.3% decline in workforce participation in a month is not, not, not good.

Midas on September 5, 2013 at 3:17 PM

Even if it is a non-seasonally-adjusted number off a rolling average. The BLS non-seasoned version has averaged approximately a 0.5-point drop between (mid-)July and (mid-)August from 1994 on, with another 0.4-point average drop between (mid-)August and (mid-)September.

Because Reuters expected even worse news on factory orders, sort of like the Europeans celebrating the fact the Eurozone GDP is expected to shrink by 0.4% (annualized -0.8%) over the last half of this year when they had been expecting a 0.6% shrinkage (-1.2% annualized).